Approach DIY auction with caution

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Dear Real Estate Adviser,
I am interested in selling my house using my own auction or a bidding system like eBay. Can I do either of these on my own without a licensed Realtor or auctioneer?
— Jon

Dear Jon,
Certainly you can auction your house online, but not in person, at least technically. In most states, you can’t stage a public auction without being bonded for at least $10,000 and having a licensed auctioneer on hand. So you might have to table that planned gavel purchase and abandon any fantasies of becoming “Colonel Jon” for a day.

Compare mortgage rates
Bankrate can help you find the best mortgage rates in your area.

But there’s another option. A silent or “reserve” auction, similar to that eBay system you mention, can effectively skirt auction restrictions, unless local or state laws prevent it. Typically, you would prep for the sale by sending out mass mailings, posting handbills and signs, and taking out strategic ads in publications to attract buyers for what would be a weekend-long open house with a “reserve” system, or minimum bid, in play. You wouldn’t need an agent or auctioneer to help with this, though some professional assistance might not hurt.

Whether buying a house at auction or via the conventional route, can help you find the best mortgage deal in your area.

You could even create your own house brochure on your computer and secure a mortgage broker to be on hand for one or both silent-auction days. As part of your promotion, you could promise to contact all bidders by phone throughout the weekend so they’ll have a chance to “one-up” the top offer before bidding closes at a preset time. If financing falls out for the winning bidder, you could simply move down the list to the next highest bidder. The problem with this system is that there is so much for-sale inventory out there, your sale may not merit as much attention as others unless you are promoting a well-located property at a generous reserve price. For example, you might have to offer a $200,000 or $225,000 reserve for a home that’s been valued at $350,000. (This is not a game for the faint of heart!)

Good auction houses typically have effective marketing matrices that reach far more serious buyers than do standard open houses and other conventional sales methods, plus they can sell your home lightning-fast under the right conditions. However, auction-house fees can run as high as 9 percent and are split in various formulas between the seller and buyer — the latter of which is known as a buyer’s premium. Unfortunately, sellers absorb the brunt of such fees these days. Plus, a large segment of auction attendees seek only rock-bottom bargains.

Online auction sites such as and have merit and command much smaller commissions, though they can’t whip up a buying frenzy like a live auction. By the way, unless you use the words “absolute auction,” your auctioned home won’t be sold unless you agree to sell for a specific bid that meets your minimum objective in these auction venues.

If you think you have the energy and savvy to reel in bidders, you might try the reserve auction route. Of course, the pricing and market dynamics and laws in your location (better check them) could thwart your efforts.

Good luck!

Ask the adviser

To ask a question of the Real Estate Adviser, go to the “Ask the Experts” page and select “Buying, selling a home” as the topic. Read more Real Estate Adviser columns and more stories about mortgages.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.